The euro rallied yesterday, logging gains of around 1% against its two biggest trading partners, the US dollar and the British pound. The afternoon saw the European Central Bank (ECB) hold interest rates at their current 0.05% level, but it was the press conference that followed the decision that triggered the euro gains. In the conference ECB President Mario Draghi stated that policy-makers were unanimous in the decision that any quantitative easing (QE) measures will not be implemented until at least the first quarter of 2015. With inflation levels getting perilously low, many expected Draghi to announce an increase in stimulus measures yesterday, so markets responded quite aggressively to the speech.
We expect a relatively quiet day today as markets recover from yesterday’s fluctuations. The only releases of note today are the German Factory Orders data, as well as revised quarterly growth figures for the Eurozone on the whole.